International Conference on "The Crisis of Capitalism,
'Globalization' and the working-class movement's response"
Athens, May 21-23, 1999

Carlos Aboim Inglez
Member of the Central Committee of the
Portuguese Communist Party

Dear Comrades,

We greet all the comrades present here, and in particular
our fraternal hosts from the Communist Party of Greece. The
topic of this Conference is of extreme importance and
relevance. But it is also very vast and complex.
We bring only a few brief notes.

* * *

Since at least mid-1997 we are in the midst of a developing
world economic crisis, that is, a crisis that has not yet
hit the bottom and which is even threatening to sink
further.

Beyond the short-term and/or local causes of its current
episodes, this crisis has precedents, among which the
following stand out: on the one hand, the previous cyclical
crises of 1974-75, 1980-82 and 1991-93; on the other hand,
a series of crises of financial dominant - such as the
October 1987 Wall Street crash, the bursting of the junk
bonds bubble and the US Savings& Loans bankruptcies in
1989, the bursting of Japan's real estate and stock
speculative bubble in 1990-91, the crisis in the EMS in
May-October 1992, the Mexican crisis in 1994-95, among
others.

Although each of these cases has its specific traits, the
present crisis flows from these precedents in at least two
fundamental aspects: (1) a latent and persistent chronic
overproduction; (2) a growing hypertrophia and instability
in the financial sphere, which is increasingly speculative,
rentier and parasitic.

The present global crisis apparently began with the
so-called "Asian crisis", which broke out in mid-1997,
continued throughout 1998 and still has no end in sight. It
became worse with the (now worsening) collapse of Russia in
mid-1998 which, in turn, strongly affected (as the "Asian
crisis" already had, in 1997) the so-called "emerging
markets" in Latin America and not only there. Both these,
in turn, affected Europe and the United States. In the
second semester of 1998, and throughout 1999, the crisis in
Brasil and other Latin American economies broke out, adding
a new important recessive factor to the overall picture.
These, so to speak, regional crises, have been accompanied
by a drawn-out drop in the prices of oil, essential raw
materials and commodities, which is still being felt and is
affecting those economies that are most dependent on these
goods. The situation in both Europe and the United States
is related to all these developments, both as causes and as
effects. Europe, whose emergence from the 1991-93 cyclical
crisis occurred later than that of the USA, was, and is
strongly conditioned by the recessionary consequences of
implementing the Maastricht criteria, the uncertainties
surrounding the Euro, the corset of the Amsterdam's
"Stability Plan". The USA, despite the resilience of its
enormous might (economic and monetary, but not only - also
its decisive influence in steering the international
institutions such as the IMF, the World Bank, WTO, etc.) is
clearly coming to the end of a cycle, and its much-heralded
boom is very relative and has feet of clay. The US is now,
potentially, the most destructive factor for the near
future.

The threat of a general recession (which already affects
nearly 50% of the world economy today) is knocking at the
door, as is recognized even by the pundits of global big
capital. The constant lowering of growth estimates which
marked 1998, as well as the unconcealed uncertainty and
concern marking their most recent analyses and prospects
(e.g., the IMF's World Economic Outlook of last April) are
no cause for optimism. After all, a growth of 2% in the
world product for 1998 is not qualitatevily different from
the rates of 1975, 1980-81 and 1991, which are years of an
acknowledged global recession. And even worse scenarios
are, quite explicitely, not ruled out - even including the
possibility of a global deflation (with drops in prices,
production and employment) and the prospect of a
depression, which many compare to that of the 1930s.

It is today almost a general consensus that the world
capitalist economy has been evolving, in the last two
decades, according to very different parameters from those
that marked the "30 glorious years" of the post-World War
period.

First of all, due to a clear deceleration in production
growth rates (despite, it should be registered, the
contribution of the New Technologies developed by the
Scientific and Technical Revolution). Whilst it is
estimated that GDP in the industrialized capitalist
countries grew at an annual average rate of close to 5% in
the 1950s and 1960s, this rate dropped to some 3% in the
1980s and to less than 2% in the first half of the 1990s.

In addition, because (after a long period of almost full
employment, growth in wages and living standards, creation
of social welfare systems and public services), we are now
witnessing an explosion of unemployment, that is becoming
massive and chronic (even in the upswings), together with
increasingly precarious working and living conditions, a
permanent pressure for lower real wages, the widespread
pauperization of the masses and the ongoing generalized
dismantling of social security systems and public services,
namely through their privatization. To mention only the
prime problem of unemployment, whilst OECD countries
officially had some 11 million unemployed in 1973, this
figure rose to 30 million in 1983 and to 34 million in
1993. The ILO's latest report estimates that over 1/3 of
the world labour force is unemployed or underemployed, even
before taking into full account the effects of the latest
recessionary outbreaks.

Finally (and without minimizing other relevant aspects), it
is essential to underline the enormous mass of financial
capital which is parasitising the productive sphere. This
phenomenum began to grow in the late 1970s, but its
cancerous growth speeded up during the 1980s and 1990s. Let
it just be said that between 1980 and 1992, the annual
average growth rate of financial assets was 2.6 times
larger (6%) than the Gross Fixed Capital Formation (2.3%),
which is essential for productive growth - and that short
term and portfolio capital flows outstripped those related
to long term direct investment. The hypertrophy of the
financial sphere - which is increasingly becoming merely
rentier or speculative, and even dealing with an enormous
mass of "fictitious capital" - is nonetheless draining a
large chunk of the wealth created by the productive sector
and imposing its own criteria upon it, essentially that of
obtaining maximum profitability in the shortest possible
time span. This causes permanent instability and
uncertainty in the economy and generates successive
devastating monetary and equity crashes.

In the conditions of the "30 glorious years" of the
post-war period, the most important capitalist countries by
and large implemented and promoted economic policies
inspired by Keynesianism - which, it is appropriate to
recall today, did not seek to jeopardize capitalism, but to
save it, to manage and consolidate it. The neo-liberal and
monetarist economic policies are completely different in
their guidelines. Having been worked out in the 1970s, they
have been ruthlessly implemented in a widespread manner in
the past two decades. These policies correspond to the new
plateau attained by contemporary capitalism, to the
difficulties which arose in pursuing the accumulation
process, and to directly serving the interests of their
main actors, the major transnational corporations and
financial capital. The turning point was, significantly,
linked to the outburst of the serious cyclical crisis of
overproduction of 1974-75, which brought back into the open
that intrinsical objective law of modern capitalism (which
many insist on denying, despite the recurring crises of
1980-82, 1991-93 and the one that is now breaking out...).
The neo-liberal offensive, under the slogan-alibis of "Less
State" and "Free Market", and characterized by the
fundamental traits of liberalization, deregulation,
competitiveness, privatization, globalization, was launched
and carried out by big business, in order to respond to its
growing difficulties in realizing surplus value and
satisfying its need to reap maximum profits in a period of
decline.

In our opinion, the present crisis is mainly the fruit of
over-production tendencies deep-rooted within capitalism as
a system, and exacerbated by the neoliberal policies. The
latter were triggered to reverse the sagging profitability
of the 1970s, and we are now facing the same consequence:
in the USA, dividends are scarcely 2% of the stock values,
almost a record of weakness for this century! But the
increasingly deregulated global movement of capital, which
was supposed to guarantee maximum efficiency, has instead
exacerbated instability and the risk of collapse; and the
greatest ever "opening" of economies to so-called "free
trade" has intensified uneven development and those very
same tendencies towards over-production, as everyone
scrambled to out-export everyone else, in a global consumer
market which neoliberal policies themselves are
restraining, in a relative but constant way.

The full effectiveness of both (correlated) sides of Marx's
law of capitalist accumulation is plainly shown up in
today's world, where Capital has acquired an almost
planetary realm in this last decade.

The increasingly gigantic private accumulation of Capital
in the hands of a scarce few, goes side by side with the,
both relative and absolute, extension of pauperization and
precarious existence of an ever increasing large majority
of Humankind.

The unprecedentedly enormous potential which scientific and
technological progress has opened up, for a fuller, more
ecological sustainable and social equitable satisfaction of
the basic material and spiritual needs of all Humankind,
stands in barbaric contradiction to the brutal
sub-standards of living of billions of human beings and the
fate of Earth itself. That is the profound contradiction of
civilization in our times, which exposes the intrinsic
historical limits of global Capitalism.

* * *

As for the current so-called "globalization" of the
economy, only a few brief remarks (I shall not allude to
many other dimensions connected with this most polysemous
word).
The use (and abuse) of this non-univocally defined (and
often just not defined or even content-confused) term, has
increasingly invaded the technical literature and the mass
media during the 1990s - undoubtedly in connection with the
disappearance of the Soviet Union and the world socialist
system, and the consequent spread of Capital's rule over
the world. By the same token, "capitalism" was replaced by
the much more suitable "market economy" pseudonym, and
"imperialism" simply silenced as an obsolete "orthodox"
archaism. This is a first and prior remark, that throws
some light on the content of that currently very
fashionable, but dubious and mis-used "globalization". And
that demands a full inquiry into its myths and realities.

A second remark. Marxism strictly demands a historical
approach - historical not just in the sense of a few recent
decades, but from the very beginning of Capitalism as a
reality. We have to put "globalization" deep in History.

Ever since the Communist Manifesto and Capital (inter
alia), Marx stressed the intrinsic tendency towards the
universalisation of Capitalism. This was so, right from the
beginning, ever since its initial and decisive phase of
constitution and consolidation in the 16th Century, which
was linked to, and accelerated by, the great Maritime
Discoveries. That was the first and decisive advance
towards "globalization". But Marx also acutely revealed the
contradictions and limits associated with this intrinsic
tendency.

A second great historical wave towards universalization of
the realm of capitalism occurred in the late 19th century -
early 20th century period, linked to, and accelerated by,
the Industrial Revolution and leading to monopoly
capitalism and imperialism. Which, as is well known, did
not eliminate the internal contradictions of its
functioning, nor diminish its historical limitations. On
the contrary, both became more profound.

As for the issues that usually are referred as crucial
distinctive for the current process of "globalization" -
and this is our brief third remark -, historical
comparisions between the present values and those of the
late 19th-early 20th centuries do not confirm such a
quantitative and qualitative novelty as are being claimed
so emphatically.

What we are facing today is, not so much a "great
breakthrough" in the history of capitalism, but capitalism
at its most basic. This third great wave of the current
"globalization", or further advance towards the
universalization of capitalism, obviously has its own
historical characteristics and limits of its present stage.
It is arising within a complex framework in which their
neoliberal policies are showing clear
signs of exhaustion, despite the much-heralded Information
Revolution. Striving to preserve, extend and reinforce the
reign of the major transnational corporations and of an
oversized financial sphere - in which the unbearable burden
of speculative and rentier Capital threatens disaster - the
governors of Big Business, namely the G-7, and their
technical servants of supranational institutions, are
already seeking some timid regulatory palliatives. But,
above all, they insist on the same "remedies" which are
exacerbating the real root cause of the "disease" - the
limits of capitalist relations of production themselves.

The contradictions and main features of capitalism under
the current "globalization" are at the same time
expressions and factors of the present crisis. And the
difficulties in overcoming it with the old methods of
pulling out of a crisis, despite all of Capitalism's might,
are now so complex precisely because capitalism is now so
universal and at the same time so fractured - between The
Triad (the real "global village") and The Rest of the
Planet, as well as within the Triad itself, within its
components, and within the other regions and countries of
the world. The "North/South" contradictions, better saying
economic and social polarization, are objectively much more
universal than Capital's homogenization of the Globe.

* * *

As for the last correlate theme of our Meeting, it is
undoubtly the point of most practical relevance, as it is
in the practice and with the masses that decisively the
present must be faced and changed, towards a better future.
In spite of this, we stress only briefly a few topics.

First: The worsening crisis of global capitalism, the
further deterioration of economic, social and politic
framework, would inflict even greater sufferings upon
world's population. Historical experience shows us that, in
this context, fertile ground to adverse conditions,
including disruptive factors, often arise and negatively
harms the united struggle of workers.

Second: So, increasing militancy and organizational
strengthening of worker's movement and struggles are of
utmost importance and urgency - just now! And so, that is
also our utmost basic and constant task and responsibility.
Not any easy task, with no universal receipts. But an
offensive, persistent, confident and courageous spirit and
class consciousness, yes, that is our universal need in our
relentless efforts to surpass objective and subjective
difficulties.

Third: National framework in organizational and struggle
actions, that is a fundamental and not surpassed ground to
fulfil those basic tasks. And strengthening of
international solidarity in common or convergent struggles,
is a vital need for the success of each and all of us.
Concrete and even limited struggles are the only solid and
viable road to advance toward larger and more general
struggles.

Fourth: Workers are not the only class or strata suffering
from the offensive of global Capital and crisis; and
historical experience shows fully that workers movement
must not confine itself in a ghetto. So, it is also of
utmost importance to converge with and support actively the
interests and struggles of a very broad range of other
people's classes and strata.

Fifth: Crisis and Big Capital offensive goes alongside with
on-going processes of degeneration and restriction of
democracy, cultural and ideological obscurantist
regression, growing militarisation and imperialist
aggressiveness. And all those linked processes nourish the
revival of fascistic and extreme-right wing forces,
outbreaks of chauvinism, reactionary nationalisms, racism,
religious and ethnic fanaticisms. Against all these
connected evils, workers movement must be also in the
forefront, advancing its core class solidarity and
humanism.

Last, but not the least: Today we are facing (among others
imperialistic interventions all over the world), a most
serious and brutal threat to peace and security in the
world, with the brazenly illegal and criminal aggression to
Yugoslavia and the recent summit of NATO in Washington.
Struggle for peace, against aggression and war, to stop
immediately the criminal bombing of Yugoslavia's peoples,
to nulliphy the "new" NATO's arbitrary disorder and
violation of international Law, for security for all
sovereign countries and peoples of the world, with real
advance in disarmament and real economic, social and
democratic development around the world - is today a top
priority for workers' movement and all peacefull men and
women of the Earth, in this threshold of 21st Century.